A lawsuit alleging breach of fiduciary duty, recklessness, fraud and other claims against Sterne Agee - what was once Birmingham's largest privately-owned investment firm before its sale in 2015 - can move forward after the Alabama Supreme Court ruled in an 8-0 decision Friday against a petition by the former company's board of directors.

Two of the company's shareholders filed a derivative suit in Jefferson County Circuit Court, alleging that lavish spending and misappropriation of funds by the Stern Agee board, including then-CEO James Holbrook Jr., depressed the investment firm's value and that its sale to Stifel served to cover up the improprieties.

Among the suit's claims were that Holbrook bought luxury watches, jewelry and women's shoes on the company dime, and that Sterne Agee paid for a 58-foot yacht, 38-foot powerboat and condos in Florida, Utah and Colorado that were "almost used exclusively for [Holbrook's] personal pleasure. It also alleged that Holbrook's wife was on the Sterne Agee payroll although "she has never performed any work or services for Sterne Agee."

Before merging with St. Louis-based Stifel, Sterne Agee required its shareholders to agree to drop pending litigation against the company, including for claims of breach of fiduciary duty, in order to receive proceeds from the merger.

But Salinas and Wainwright argued that the agreement was not enforceable because the improper conduct is what led to the sale.

While Jefferson County Circuit Court Judge Peyton Thetford sided with the board of directors in a January 2017 ruling, Jefferson County Circuit Court Judge Bernadette Brown Green ruled in favor of the shareholders' motion to reverse or amend the ruling in May, citing a "manifest error of law" by Thetford. Green also said that the discovery phase of the case could proceed.

The board appealed to the Alabama Supreme Court, requesting that the state's highest court demand the trial court reverse Green's ruling to reinstate the case. But in the 8-0 decision, the Alabama Supreme Court said it was not necessary to take that "extraordinary step," and disagreed with the board that appealing in the event of a judgment against them would be insufficient relief.

"The petitioners have an adequate remedy by way of appeal should they suffer an adverse judgment. Accordingly, we deny the petitions," Alabama Supreme Court Justice Tommy Bryan wrote.

The higher court's decision was not unanimous; Justice Will Sellers recused himself from hearing the petition.

Tom Baddely, the attorney representing the shareholders, said the decision was "a long time coming."

"A terrible injustice was reversed which will give the stockholder employees a chance to obtain fairness and answers about their company and its value after the forced sale to Stifel," he said in an email to AL.com.

Gregory Hawlery, the attorney for Holbrook, could not immediately be reached for comment.